Two-Year High on Gold Prices Fueled by Brexit-Spooked Investors

Gold rose to its highest price in more than two years on Wednesday, as investors piled back into the safe-haven asset after the benchmark U.S. government bond yields hit all-time lows amid renewed market jitters over Britain’s decision to leave the European Union.

Asian share markets turned tail as fears over instability in the European Union returned with a vengeance, sending the pound to three-decade lows and hammering risky assets of all stripes.

Yields on U.S. Treasuries, the benchmark for bonds worldwide, hit record lows out to 30 years on Tuesday. Spot gold touched its highest since March 2014 at $1,371.40, and was trading up 0.8 percent at $1,366.86 an ounce by 0658 GMT. It surpassed the $1,358.20 mark hit on June 24 in the immediate aftermath of the Brexit vote.

U.S. gold was up 0.8 percent at $1,369.60. Gold priced in sterling rose to its highest in over 3 years, touching a high of 1,069.36 pounds an ounce.

“No one is able to understand how much risk is yet to be unraveled (from Brexit). That is an uncertainty that no one likes. This is what is driving gold prices higher,” said Helen Lau, an analyst at Argonaut Securities in Hong Kong.

The Bank of England took steps on Tuesday to ensure British banks keep lending as the financial consequences of the decision to leave the EU began to materialize.

Gold is often favored as a hedge against economic and financial uncertainty.

“Additional gains (in prices) may be tough going. Longs may take the opportunity to take profits and any relaxation in risk may undermine prices,” HSBC (hsbc) analyst James Steel said in a note.

Further boosting gold, were comments from New York Federal Reserve President William Dudley, who said that the central bank can be patient on raising interest rates due to low inflation and uncertainties over U.S. economic prospects.

Investors will be watching out for signs on the U.S. Federal Reserve’s thinking on rates from minutes of its June 14-15 meeting due later in the day.

UBS (ubs) raised its gold price forecasts from 2016 through 2020, saying the bullion had likely entered the early stages of the next bull-run.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, increased 3.02 percent to 982.72 tonnes on Tuesday, the highest since June 2013. Spot silver’s rally hit a bump on Tuesday as the metal fell 2 percent, its biggest single-day loss in about three weeks. It was up 1.6 percent at $20.23 on Wednesday. Among other precious metals, platinum, which was trading at two-month highs, was down 0.5 percent at $1,067 an ounce.

Palladium was up 0.5 percent at $600.73.

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